Commentary

  • The Energy Report -Just whose recession is it anyway?

    November 09 2012 9:33 AM

    As we head towards the fiscal cliff and the markets from gold to bonds to stocks to oil start to price in a recession the question becomes, just whose recession is it anyway? Is this going to be a Democratic recession or a Republican recession? Today President Obama may give a bit of a view on this fiscal cliff hanger in what could become a defining moment for the success or failure of his second term. Now some thought I was a little hard on the President and Harry Reid, even after Mr. Reid’s comments about a tax increase mandate, but in reality I was trying to point out the dangers of that rigid position especially when it comes to the implementation of a carbon tax that would drive an already struggling middle class into economic oblivion.

  • Alpari Grain Report 11/09

    November 09 2012 4:40 AM

    Thursdays weekly export sales report, our primary report for demand trends, was disappointing across the board. Wheat exports for the new marketing year ending June 1 was a dismal 209 t.m.t. down 42% from the previous week and 40% under a weak four week average. Big world wheat buyers like Egypt were absent again from the purchasing list. These big buyers of high quality wheat for milling foods for human consumption are necessary to sell to for size to be price bullish on futures. We remain, as we have all year, a port for small purchases of low-quality wheat for the animal feed ration.

  • The Nemenoff Report Bonds Lower, S&P's higher, Silver Higher

    November 08 2012 12:16 PM

    Dec. Bonds are currently 9 lower at 150’01. If you went short above 150’15 yesterday (the high was 150’19) either take the short term profit or use a protective buy stop at 151’06 for protection. If your intention is to look for a longer term trade, lower your buy stop to break even if the market trades below the 149’26 level. Support is currently the 148’08 level.

  • The Nemenoff Report Bonds Higher, S&P's Lower, Silver Lower

    November 08 2012 3:41 AM

    Dec. Bonds are currently 1’26 higher at 150’03 and the 10 Yr. Note 29 higher at 133’20. As expected, an Obama victory was friendly to Bonds as the market will percieve a continued policy of easing at the very least through 2013. Over the last couple of weeks I have posed the question in the “Report”, “Would you recognize an improving economy?”. I’m going to float the premise that things are slowly improving and that ultimately rates are going to slowly inch higher. That being said, I maintain my negative bias and will continue to look for trades from the short side of the market on rallies, not looking for a home run, but willing to take singles and doubles. Resistance is currently the 150’15-151’00 level, an area where I am willing to enter the market from the short side. Support is currently 148’08.

  • The Energy Report - Pricing in More Pain

    November 07 2012 10:15 AM

    Futures markets correctly priced in an Obama victory yesterday and all of the economic pain that will go along with it. As I have said weeks ago, before it was a popular topic, that an Obama victory would be wildly bullish for commodities as it would mean a vote of confidence for Fed Chairman Ben Bernanke and his policies of easing. Of course at the same time that means that the market is pricing in perhaps a decade of more economic pain. The markets are saying that under an Obama presidency get ready for continued high unemployment, higher budget deficits, higher taxes, and higher gasoline prices and less job creation.

  • Brent Crude Oil: Pivot Point Signal 07.11.2012

    November 07 2012 3:19 AM

    Buy at 110,80 Stop Loss at 110,30 Take Profit at 111,30

  • The Nemenoff Report Bonds Lower, S&P's higher, Silver Higher

    November 06 2012 9:31 AM

    Dec. Bonds are currently 9 lower at 148’31 and the 10 Yr. Note 3 lower at 133’01.5. Last Friday we covered short positions on the break after the Unemployment Report giving us a small short term profit. I still remain negative on this market but will remain on the sidelines for the moment and wait for the election results before re-entering this market. Given the Economic Plans by the two candidates my gut feeling is that the Bonds will break on a Romney win and hold firm on an Obama victory for the short term.

  • The Energy Report - Is the rebound in oil a good thing?

    November 06 2012 8:25 AM

    Well if you consider that perhaps it is a sign that things on the East Coast may have a chance at some sense of normal, that would be a good thing. Yet the truth is that it may be too soon for the market to be reacting to the rebound in demand. The late day spike seemed to start in Brent Crude and could be a sign of the market growing unease with the violence on the Saudi Yemen border. Brent crude spiked late in the session on a report that two Saudi border guards were killed in a terror attack on the Yemen border. The tensions seem to rise even more when Saudi Arabia abruptly changed its interior minister.

  • The Energy Report - Hey Bro, Can you spare some gas.

    November 05 2012 10:20 AM

    Despite the gas line in New Jersey the market tanked on the reality of demand destruction. Oh sure the better than expected jobs number led to a major break as the risk off trade came into play. Word that Colonial Pipeline. Bloomberg reported that the Colonial Pipeline Co. began deliveries from its Linden, New Jersey, fuel tank farm to customers with operable terminals while two refineries in the state remained shut after Hurricane Sandy.

  • The Energy Report - The Northeast Triangle

    November 02 2012 7:51 AM

    Problems continue to mount in the aftermath of Hurricane Sandy and the inability to open up the ports is creating a northeast triangle. Like the Bermuda triangle before it oil-tankers are caught in some type of a weird twilight zone just floating around unable to off load it wares. The unknown as to when the heavily damaged ports can reopen has already caused movement in the markets here and around the globe. We saw heating oil sell, despite a somewhat bullish drawdown in supply, in the weekly Energy Information Administration supply report and it was led lower by a sharply lower gas-oil market in Europe. The market reacting to the incredible demand destruction in the aftermath of the storm and supply that was supposed to be destined for the United States.

  • Brent inches below $108 ahead of U.S. jobs data

    November 02 2012 3:38 AM

    Brent crude slipped below $108 a barrel on Friday as investors look ahead to key jobs data from the United States for more signs of economic recovery, which would boost fuel demand. Data from the United States and China this week pointed to some stabilization in the global recovery trend, but investors remained skeptical about a sustained improvement in the fragile economy.

  • The Nemenoff Report Bonds Lower, S&P's higher, Silver Higher

    November 01 2012 5:14 PM

    Dec. Bonds are currently 20 lower at 148’22 and the 10 Yr. Note down 8.5 at 132’24.5. This morning’s Non-Farm Productivity Report showed an increase of 1.9% vs. average expectations 2.0%. Weekly Jobless Claims were down 9,000 to 363,000 vs. average expectations of a decline of 3,000. ADP Private Sector Jobs Report showed an increase of 158,000. I still have a negative bias and remain a seller for short term trades (1-3 days) above the 148’26 level. Yesterday the market gave an opportunity to cover short positions from Tues. recommendation trading as low as 148’01. For the near term support is currently 147’26 and resistance 149’01. Monthly Unemployment Report tomorrow.

  • Pre-Opening Wheat Market Report 11/01

    November 01 2012 10:17 AM

    December Chicago wheat was trading 6 cents higher near 7:30 am CST. Outside market forces look positive today and news of very poor crop conditions ahead of dormancy for the winter wheat crop helped to support. A revision down in Russia wheat production and news of a very poor start to the winter wheat crop overnight helped to support solid gains. A dry outlook for the central and northern plains for the next week added to the positive tone. The weekly Winter Wheat Planting report showed that 88% of the crop is planted compared to 81% last week and 86% last year.

  • The Energy Report - China versus the East Coast

    November 01 2012 8:22 AM

    Today the energy complex is going to have to balance an increase in the China Purchasing Managers’ Index number versus the historic energy demand destruction caused by Hurricane Sandy. The day after RBOB wholesale gasoline futures had a classic expiration squeeze play pop and drop other commodities are looking to China after renewed hopes of an across the board commodity rally after coming off the worst monthly loss in 5 months. The National Bureau of Statistics and China Federation of Logistics reported that Chinese manufacturing index increased to 50.2 in October from 49.8 in September. HSBC mirrored that commodity bullish enthusiasm reporting their China PMI showing an increase from 47.9 in September to 49.5 in October which would be an eight month high. While copper and precious metals and grains may soar the energies may lag as the magnitude of this storm and its epic demand destruction starts to sink in.

  • The Energy Report Wednesday October 31, 2012 Enough with Refineries

    October 31 2012 11:12 AM

    Enough with the refineries already! At least on the East Coast! Let’s talk about the refineries that will really impact gasoline prices and that is in Texas City and in Indiana. With all the talk about the storm is about East -Coast refineries when it should be about the destruction of demand. As I have written before there are three phases in trading a disaster. The first is demand destruction, the second assessment, the third rebuilding. The US stock market that is getting ready to reopen is already focused on the rebuilding phase.

  • The Energy Report - Storm Surge Corrected!

    October 29 2012 9:53 AM

    As the East Coast and the largest city in the United States gets ready for Franken-storm the energy markets will price in the risk and the balance between lost supply and the destruction of demand. While the storm will shut down 6.5% of US refining capacity and motorists will top off their tank the shutdown of major cities and the expected power outages may take a toll on demand unlike anything we have seen before. The impact on demand may not last for hours but more than likely for days. This could be the biggest demand destruction event in history. The East Coast is by far the largest consumer of gasoline as they consumed 3,20200 barrels per-day.

  • Alpari Grain Report 10/26

    October 27 2012 4:10 AM

    Thursdays weekly export sales report drew a negative response from futures. The report tells us how much of each grain was sold for future shipment and becomes our best report on demand fundamentals. Corn sales were 142 t.m.t. down 13% from the prior week. Average sales the last four weeks were 159 t.m.t. Average weekly sales for October 2011 were 1.161 m.m.t. and October 2010 569 t.m.t.. The high price of corn in October 2011 was 4.50, October 2011 7.50 and October 1 this year's 7.75. Price rations commodity. That's the purpose of the market. But corn exports are sharply lower than a year ago as a result of world demand for feed grains increasing for three consecutive years lowering our corn ending stocks to historically low levels, while production issues failed to keep pace. The high price is rationing the crop but the government as well has played a role in rationing.

  • The Nemenoff Report Bonds Lower, S&P's higher, Silver Higher

    October 26 2012 9:29 AM

    Dec. Bonds are currently 19 higher at 147’10 and the 10 Yr. Notes 10 higher at 132’07. I continue with my long term negative bias and look to be a seller on strong rallies. At the moment I will be a seller above 148’26 if the market allows. This morning’s GDP number of up 2.0% was slightly better than expectations of 1.8%.

  • The Energy Report Friday -Sandy, Cant You See?

    October 26 2012 9:02 AM

    Sandy Can’t you see, that you will cause misery? The refiners made a start but now you could tear them apart. Oh please go out to sea! Hurricane Sandy is far from a dandy threatening to be one of the worst storms in history. Because it will blow away ghosts and goblins it is being called the “Frankenstorm”. It will also blow energy demand. Already oil prices that were under pressure as downgrade rumors swirled and we took another hit after Apple had lousy earnings. Who knew I-PADS ran on oil? Really they blamed rising commodity costs and increasing competition.

  • The Nemenoff Report Bonds Lower, S&P's higher, Silver Higher

    October 25 2012 10:14 AM

    Dec. Bonds are currently 1’01 lower at 146’14 and the 10 Yr. Note 17 lower at 131’27. News out of Europe and Asia that the pace of slowing economies is not quite as disparate as once thought has bumped the rate on the 30Yr. Bond to just above the 3.0% level. This morning’s Weekly Jobless Claims showed a decline of 23,000 and Durable Goods orders were up 9.9% vs. expectations of 7.8%. The FOMC has left rates unchanged and will continue their strategy of buying $40 billion worth of long maturity treasuries per month for the near future. What is “up in the air” for the moment is Bernanke’s continuing tenure as Fed Chair, especially if Romney should pervail in the upcoming election. A new Fed chair could could signal an end to continued near zero rates for short term instruments. I maintain my negative bias and will continue to be a seller on sharp rallies.